Australian and Singaporean courts clarify ‘own name’ defence

This article first appeared on WTR Daily, part of World Trademark Review, in May 2016.
For further information, please go to www.worldtrademarkreview.com.

The bona fide use of ‘own name’ is a longstanding defence to trademark infringement in Singapore and Australia. However, although case law on the application of the defence is sparse in both countries, the Court of Appeal of Singapore and the Federal Court of Australia have recently issued decisions which provide guidance on the application and parameters of this defence.

The bona fide use of ‘own name’ is a longstanding defence to trademark infringement in Singapore and Australia. However, although case law on the application of the defence is sparse in both countries, the Court of Appeal of Singapore and the Federal Court of Australia have recently issued decisions which provide guidance on the application and parameters of this defence.

While both courts held that the defence was not applicable on the facts before them, there are subtle differences in the treatment of the defence. This article undertakes a critical comparison of the approach adopted in the two jurisdictions.

The applicant has been the registered proprietor of the following logo mark since 2002 in respect of advertising and event management services in Classes 35 and 41.

The defendant was incorporated in Singapore in 2012 and commenced use of the following logo marks in respect of event marketing services.

The applicant took action for infringement of the registered mark and the defendant sought to rely on the ‘own name’ defence asserting that it was merely using its corporate name “in accordance with honest practices in industrial or commercial matters” (Section 28(1)(a) of the Trademarks Act 2002).

The defendant was successful in the first instance, but the Court of Appeal overturned that decision. The court held that the defendant’s use was not in accordance with honest practices as there was evidence that prior to the defendant’s incorporation, a related entity had misrepresented itself as a Singaporean company named ‘AMC’ and the early designs of the offending marks bore an uncanny resemblance to the registered mark. This strongly suggested an intention to misrepresent itself as the applicant and, further, the defendant could not provide a satisfactory alternative reason for adopting the offending marks.

The applicant was the registered proprietor of the mark FLEXO-PACK since 2008. The defendant was incorporated in 2010 in Australia and commenced use of the mark FLEXOPACK. The applicant sued, among other things, for infringement of its registered mark and the defendant argued that it was merely using its own name “in good faith” (Section 122(1)(a) of the Trademarks Act 1995).

The court held that the ‘own name’ defence could not be invoked because the defendant had not used its full name ‘Flexopack Australia’. Moreover, the defendant had failed to satisfy the good faith element as it had not undertaken reasonable due diligence to ensure its chosen name did not conflict with a registered mark. The court also held that even if the defendant’s use was in good faith initially, once the defendant was put on notice of the applicant’s rights, its subjective knowledge of the possibility of confusion deprived it of the defence from that point.

Common principles and potential divergences between the two jurisdictions

There are synergies in the Australian and Singaporean courts’ treatment of the defence. It now appears to be settled in both countries that the defence applies to corporations as well as to natural persons and that the onus of establishing the defence rests with the infringing party.

Further, and notwithstanding the different wording used in the Australian and Singaporean legislation, the courts in both jurisdictions will consider the bona fides of the use of the name. This entails a subjective and objective test, namely the defendant must demonstrate an honest belief that no confusion will arise in addition to whether their actions accorded with what a reasonable and honest person in their position would do. In both decisions, the courts recognised that failure to exercise reasonable diligence before choosing a name will put at issue the bona fides of the defendant.

There are, however, subtle differences in the interpretation of the scope of the defence in the two countries. In particular, while both regimes have extended the scope of the defence to include use of an entity’s name with truncations (eg, by omitting corporate signifiers such as Pty Ltd) which do not increase the likelihood of deception/confusion, the Australian position on this issue is arguably more conservative than in Singapore. In the Flexopack decision, truncation of Flexopack Australia Pty Ltd, to Flexopack, was held to exceed the scope of the defence. However, in the AMC decision, the Singapore Court of Appeal did not appear to consider that truncation of AMC Live Group China (S) Pte Ltd to AMC Live or AMC Group would deprive the defendant of an ‘own name’ defence. Moreover, the Singapore courts have expressly extended the ambit of the defence to include trading names, a step which the Australian courts have not taken.

Another subtle, but crucial, point of distinction is the application of the defence once the defendant becomes aware of the existence of the potential for confusion. The position in Australia now seems to be that once a party is notified of the potential infringement of a registered mark, use of the infringing mark ceases to be in good faith and, therefore, falls outside the scope of the defence. This issue was absent from the AMC case.

Conclusion

Both Australia and Singapore appear to treat the ‘own name’ defence as a narrow one, which requires the infringing party to demonstrate objective and subjective good faith in adopting and using the name. However, unlike Singapore, the Australian courts have not as yet expressly extended the scope of the defence to trading names. Comparatively, the Australian approach arguably favours trademark proprietors, noting that the defence may be extinguished by notice.